Global value chains,large-scale farming,and poverty: Long-term effects in Senegal

This paper presents panel data evidence on the impact of expansion of global value chains and large-scale export-oriented farms in developing countries over almost a decade. We estimate the income effects of wage employment on large-scale farms in the horticultural export sector in Senegal, using data from two survey rounds covering a seven-years period of rapid expansion of the sector. We estimate average income effects as well as heterogeneous income effects, using fixed effects and quantile fixed effects regressions. We find that poverty and inequality reduced much faster in the research area than elsewhere in Senegal. Employment in the horticultural export sector is associated with higher household income and the income effect is strongest for the poorest households. Expansion of the horticultural export sector in Senegal has been particularly pro-poor through creating employment that is accessible and creates substantial income gains for the poorest half of the rural population. These pro-poor employment effects contrast with insights in the literature on increased inequality from rural wage employment.     

Impact of off-farm income on food security and nutrition in Nigeria

While the poverty implications of off-farm income have been analyzed in different developing countries, much less is known about the impact of off-farm income on household food security and nutrition. Here, this research gap is addressed by using farm survey data from Nigeria. Econometric analyses are employed to examine the mechanisms through which off-farm income affects household calorie and micronutrient supply, dietary quality, and child anthropometry. We find that off-farm income has a positive net effect on food security and nutrition. The prevalence of child stunting, underweight, and wasting is lower in households with off-farm income than in households without. Using a structural model, we also show that off-farm income contributes to higher food production and farm income by easing capital constraints, thus improving household welfare in multiple ways.     

How does population density influence agricultural intensification and productivity? Evidence from Malawi

This article uses nationally representative household-level panel data from Malawi to estimate how rural population density impacts agricultural intensification and household well-being. We find that areas of higher population density are associated with smaller farm sizes, lower real agricultural wage rates, and higher real maize prices. Any input intensification that occurs seems to be going to increasing maize yields, as we find no evidence that increases in population density enable farmers to increase gross value of crop output per hectare. We also find evidence that households in more densely populated areas increasingly rely on off-farm income to earn a living, but there appears to be a rural population density threshold beyond which households can no longer increase off-farm income per capita.     

Income diversification and entry barriers: evidence from the Tigray region of northern Ethiopia

Farm households diversify their income sources into off-farm wage employment motivated by low farm income and availability of surplus family labor, whereas they enter into off-farm self employment to earn an attractive return. Farm households have upward-sloping, although inelastic, off-farm labor supply curves. Therefore, increasing the availability of off-farm activities and improving the wage rate received by farm households can expand the economic activity of the Tigray Regional State. Due to entry barriers, relatively wealthy farm households may dominate the most lucrative rural non-farm activities such as masonry, carpentry and petty trade. Hence the underlying factors that hinder participation in non-farm activities such as credit constraints and lack of skill may have to be addressed through the provision of credit and technical training for the poor.     

Collective Bargaining and Within-firm Wage Dispersion in Spain

This paper analyses the effect of collective bargaining on within‐firm wage dispersion for the case of Spain. What is relevant in the Spanish case is to compare the effect of the two basic levels of bargaining (firm and sector) on wage dispersion. By using the Oaxaca–Blinder decomposition, this paper concludes that collective agreements at firm level have a negative effect on wage dispersion. At the same time, firms that have signed these types of agreements show greater wage dispersion than those covered by agreements at the sector level, owing to the positive and compensating effect of firms’ and workers’ features.     

Welfare effects of vegetable commercialization: Evidence from smallholder producers in Kenya

We investigate whether smallholder horticultural commercialization is able to, as often stipulated, reduce poverty in developing countries with the help of panel household survey data from Kenya. We find evidence for a positive association between vegetable commercialization and household welfare, even when controlling for unobserved heterogeneity across households. Interestingly, the effect differs depending on which market vegetables are being produced for: commercialization through the export market is consistently positively associated with income but not wealth, while there is some limited evidence for commercialization through the domestic market channel being positively related to welfare measured by asset holdings and income, depending on the specification.     

Labor market participation of Chinese agricultural households: Empirical evidence from Zhejiang province

This work is devoted to the analysis of the different labor market participation regimes of Chinese farm households over the reform process in the 1980s and 1990s. Using household data over the period 1986–2002 from the province Zhejiang, we apply a multinomial logit model to empirically examine household, farm, and regional characteristics affecting the probability that farmers participate in one of four alternative labor market regimes. As generally accepted, off-farm participation is the dominant form of farm households’ labor market participation. But rural households show additionally a significant impact on rural employment mainly linked with non-agricultural household business. Results suggest that labor market decisions are significantly related to several family, farm, and village characteristics. In particular, we find education to be a key determinant of participation. Furthermore, results point to a higher probability of female household members to take up off-farm work.     

Minimum Cash Wages,Tipped Restaurant Workers,and Poverty

This is the first study to examine the effect of increases in the tipped minimum cash wage—the wage employers must pay to tipped employees—on poverty. Using March Current Population Survey data (1988–2014), we find that tipped minimum cash wage increases are associated with declines in the risk of a tipped restaurant worker living in a poor family (elasticities around –0.2). However, we find little evidence of poverty‐alleviating effects when using the household rather than the family as the sharing unit. This result is consistent with evidence that a substantial share of tipped workers who live in a poor family live in a nonpoor household with persons unrelated by blood, marriage, or adoption who contribute to the household's income. Furthermore, we find that tipped minimum cash wage hikes are associated with increases in the risk of a younger, less‐educated individual living in a poor family or household. Adverse labor demand effects that redistribute income among low‐skilled individuals drive these results. We conclude that raising the tipped minimum cash wage is a poorly targeted policy to deliver income to poor restaurant workers.     

Can mobile phones improve gender equality and nutrition? Panel data evidence from farm households in Uganda

Since 2000, mobile phone technologies have been widely adopted in many developing countries. Existing research shows that use of mobile phones has improved smallholder farmers’ market access and income. Beyond income, mobile phones can possibly affect other dimensions of social welfare, such as gender equality and nutrition. Such broader social welfare effects have hardly been analyzed up till now. Here, we address this research gap, using panel data from smallholder farm households in Uganda. Regression results show that mobile phone use is positively associated with household income, women empowerment, food security, and dietary quality. These results also hold after controlling for possible confounding factors. In addition to the household-level analysis, we also look at who within the household actually uses mobile phones. Gender-disaggregation suggests that female mobile phone use has stronger positive associations with social welfare than if males alone use mobile phones. We cautiously conclude that equal access to mobile phones cannot only foster economic development, but can also contribute to gender equality, food security, and broader social development. Further research is required to corroborate the findings and analyze the underlying causal mechanisms.     

Impact of off-farm labor supply on food expenditures of the farm household

Farm households diversify their income sources by working off the farm. This is a risk management strategy that is used by farm households in both developed and developing countries. Income diversification via off-farm work is associated with higher incomes and food consumption. However, little is known about the association between off-farm work and farm household food expenditures. In an effort to bridge this gap, this study attempts to assess the impact of off-farm work decisions by the operator and/or the spouse on the food expenditures of the farm household. Using a nationwide farm household survey in the United States and new econometric method, we find that the decisions of the operator and/or the spouse to work off the farm are significantly interrelated (29%). However, these two decisions affect food expenditures in different ways. The operator’s off-farm work decision is positively related to food expenditures, while the spouse’s decision is negatively associated with expenditures on food by the farm household.     

Women’s empowerment boosts the gains in dietary diversity from agricultural technology adoption in rural Kenya

Using new survey data from rural Kenya, this paper assesses the moderating effect of women’s empowerment on the relationship between agricultural technology adoption and women’s dietary diversity. We use a multiple treatment endogenous switching regression framework to control for potential endogeneity of women’s empowerment and technology adoption. We find that women’s empowerment has a positive and significant effect on the women’s dietary diversity score regardless of technology adoption status. We further show that women’s empowerment enhances the positive effects of technology adoption on women’s dietary diversity. Although technology adoption has a positive impact on women’s dietary diversity regardless of empowerment status, its effect is stronger for households with empowered vs. disempowered women. Study results suggest that individual and household welfare could be enhanced to a greater degree through interventions that promote women’s empowerment and technology adoption simultaneously rather than separately.     

Can off farm employment affect the privatization of social safety net? The case of self-employed farm households

This study uses a two-stage econometric framework with farm household level data to investigate whether off-farm work of operators and spouses influences healthcare expenditures and retirement savings. Results indicate that agricultural policy discourages off-farm work by farm operators and spouses. However, off-farm work decisions of farm couples significantly decrease healthcare expenditures and increase retirement savings of farm households in the US. The effect of farm spouse’s off-farm employment on household retirement saving is more pronounced. These conclusions can extend to middle-income countries where off-farm work may enable farmers to afford better healthcare and retirement pension plans.     

Does Individualizing the Labor Contract Hurt Women?

The twenty‐first century has been marked by a retreat of the collective bargaining rights of public employees throughout the United States. This study exploits the variation in legal environments resulting from these reforms to estimate the causal impact of different collective bargaining policies on public employee compensation. Using data from the American Community Survey, results show a modest wage penalty at the aggregate level for employees covered by constraints on collective bargaining. However, this wage penalty is differential and is concentrated on women in all but one case—a legal environment in which collective bargaining over wages has either been prohibited or directly constricted, allowing governments to periodically institute wage freezes and caps on raises for public employees. In this case, a pre‐existing wage gap in which men earned more than women is disappearing as male and female earnings converge at a lower wage. The paper suggests that the long‐term effects of restricting collective bargaining occur through the individualization of the labor contract and should be examined along individual‐level characteristics, such as gender.     

Household-level determinants of adoption of improved natural resources management practices among smallholder farmers in western Kenya

Integrated natural resources management (INRM), of which integrated soil fertility management (ISFM) is a component, offers considerable promise for increasing food production in Kenya. It nonetheless remains unclear whether ISFM/INRM techniques lend themselves easily to adoption by smallholder farmers. Using panel data collected in western Kenya in 1989 and 2002, this study finds that resource constraints limit many farmers’ adoption of ISFM/INRM techniques. The size of the farm owned by a household, the value of its livestock, off-farm income, family labor supply, and the educational attainment and gender of the household head all had a significant positive effect on the likelihood of adoption. Similar factors were found to be statistically significant in discouraging abandonment of the practices under study. There thus seem to exist reinforcing feedback between investments in soil fertility management and household wealth, as measured by asset endowments. Our findings raise important questions as to whether ISFM and related techniques are really affordable to poorer smallholder farmers.     

Wage Cyclicality Under Different Regimes of Industrial Relations

We analyze the effect of collective wage agreements and of works councils on the cyclicality of real wages. Using employer–employee data for western Germany (1995–2004), we find that wage adjustments to positive and negative shocks are generally not symmetric. Wage growth increases in all industrial relations regimes when unemployment is falling, but this inverse relationship is weaker when unemployment is rising. Moreover, in plants with individual‐level bargaining, wages do not adjust at all to rising unemployment. Works councils increase wage growth only in firms covered by sectoral agreements, but they do not affect the cyclicality of wages.     

Dissecting Between-Plant and Within-Plant Wage Dispersion: Evidence from Germany

Using rich linked employer–employee data for (West) Germany between 1996 and 2014, we conduct a decomposition analysis based on recentered influence function (RIF) regressions to analyze the relative contributions of various plant and worker characteristics to the rise in German wage dispersion. Moreover, we separately investigate the sources of between-plant and within-plant wage dispersion. We find that industry effects and the collective bargaining regime contribute the most to rising wage inequality. In the case of collective bargaining, both the decline in collective bargaining coverage and the increase in wage dispersion among the group of covered plants have played important roles.     

Pull and push: individual farming in Hungary

This paper is motivated by the fact that (part-time) individual farming is commonly observed among rural households in a number of transition economies but it is not clear prima facie if such resource allocation is optimal. A conceptual model of household labor allocation between individual farming and off-farm wage employment is developed. The model explicitly accounts for the role of household endowments in labor allocation as the analysis is conditioned on the status of factor markets. The hypotheses are empirically tested using 1998 data from a country-representative survey of rural households in Hungary, an advanced transition country, which only recently became EU member state. Results provide evidence that capital market imperfections still remain. Implications for the policies related to agricultural sector restructuring, employment and rural development are discussed.     

Wage councils,product markups and wage markdowns: Evidence from Uruguay

In 2005, after a leftist coalition won the national election for the first time, Uruguay returned to sector-level wage bargaining councils with active government participation. We estimate product markups and wage markdowns using firm-level data for the period 2002–2016, and report decreasing wage markdowns and increasing -to a lesser extent- firm-level product markups. We find statistically significant impacts of minimum mandated wages on product markups and wage markdowns, and additional effects of unions on wage markdowns. The evidence suggests that firms operate in monopsonistic labor markets. Though their bargaining power in the labor market was reduced over time as a result of wage councils, firms were able to pass a sizable part of the increases in labor costs to consumers.     

The Union Wage Effect in Japan

Previous studies point to Japanese labor unions’ lack of bargaining power that results from their organization at an enterprise level. However, a detailed examination of the institutional setting backed by the Labor Standard Law and Trade Union Law reveals that unions have strong bargaining power against deteriorating work conditions. This paper examines the effect of unions on wages using the Japanese General Social Surveys 2000–2003, which cover a period of economic stagnation. We find a robust union wage premium for both males and females. A Cotton–Neumark decomposition reveals that about one‐fifth of union workers’ higher wage is explained by the difference in the union and nonunion wage structures. We also can confirm the union wage compression effect using the DiNardo, Fortin, and Lemieux (1996 ) method. Union workers are likely to think that they will not find jobs with similar compensation packages if they leave their current jobs. In summary, unions in Japan contribute to an increase in the average wage and compress the wage distribution among their workers. This result is reconciled with previous findings by considering the uniqueness of the macroeconomic conditions of the sample period.     

The Impact of Collective Bargaining Legislation on Strike Activity and Wage Settlements

We examine the effects of collective bargaining legislation, such as (among others) bans on replacement workers and reinstatement rights, on private sector strike activity and wage settlements using Canadian data from 1978 to 2008. Our estimates indicate that this legislation does not have a statistically significant effect on the incidence of strikes. However, we do find that some of the policy variables have a statistically significant effect on strike duration and wage settlements.